Are townhomes a good investment?

[Account Closed]

Any input on townhomes as an investment (most likely turning it into a rental after a year or so)? I'm looking in New Jersey relatively close to Philadelphia. There are a decent amount of townhomes available in the low 200 range and below while single family homes are scarce at the moment. I have been looking at the price history of them and for a majority of them they seem to never go up in value or loose they value compared to its original price when built. Obviously HOA fees can make or break a rental but besides that has anyone had experience with townhomes?

[Chris Coleman]

@Tyler Berardinelli just to be clear, you’re asking about townhomes, and not condos, correct?

If so, town homes are basically the same as a single family home, but just attached to others next to it. The owner owns the property in its entirety, including both the house and the small plot of land it's sitting on. There can be an HOA if it's in a neighborhood that has one, but it's not always the case. But detached single family homes can also be in neighborhoods with an HOA...

If the townhome is not going up in value, and especially if it’s going down, then it’s most likely the neighborhood and not the property itself. Thus, buy in a community where properties values are historically increasing.

Especially in the Mid Atlantic and Northeast like where you’re talking about, townhomes are very common, and can be good investments if the numbers work out good. I’ve owned several townhomes in the Washington DC area and done very well.

In my experience there’s nothing different about analyzing the deal on a townhome than what you do for a detached single family home. It’s the same.

Again, not talking about Condos here, because that can be a bit different.